In a major policy initiative unveiled today, the European Commission presented a comprehensive Steel and Metals Action Plan, aiming to revive, modernize, and secure Europe’s crucial metal industries. This plan, built around six key pillars, represents the EU’s most ambitious intervention to date to protect its industrial base amidst rising global competition, decarbonisation pressures, and energy price volatility.

The Commission’s analysis points to an urgent need for a sector-specific strategy, as the steel and metals industries face a critical turning point. Declining production, global overcapacity, high energy costs, and stalled investments in clean technologies pose severe risks not only to these sectors but to Europe’s broader economic, technological, and defence capabilities.

To meet these challenges head-on, the Action Plan proposes an integrated framework structured around six strategic pillars:

Ensuring Access to Clean and Affordable Energy

High energy prices have become the central obstacle to competitiveness for the steel and metals industries. Before the energy crisis, energy costs represented around 17% of steel production costs and 40% for aluminium. In 2022, during the crisis peak, these figures surged dramatically.

The Action Plan proposes measures to lower electricity costs for energy-intensive industries, facilitate access to Power Purchase Agreements (PPAs), and enable faster grid connections. New instruments, including clean energy State aid and guidance for long-term contracts, will help industries access affordable and predictable clean electricity, ensuring that decarbonisation remains feasible and economically viable.

Preventing Carbon Leakage

While the Carbon Border Adjustment Mechanism (CBAM) will apply financial obligations on carbon-intensive imports starting in 2026, the risk of carbon leakage for exports remains. European producers may face disadvantages when competing abroad against industries not subjected to similar environmental costs.

To address this, the Commission will propose solutions for export sectors and expand CBAM coverage to include certain downstream steel and aluminium products. Anti-circumvention measures will also be introduced to prevent manipulation of carbon reporting and unfair market practices.

Promoting and Protecting European Industrial Capacities

The Action Plan acknowledges the existential threat posed by global overcapacity, primarily from China and other subsidizing countries. European production facilities face shrinking margins and reduced global market share.

The Commission proposes tightening existing safeguard measures on steel imports and introducing a permanent, highly protective instrument after 2026. It is also ready to launch new investigations into critical sectors like aluminium and ferroalloys if needed. Furthermore, new trade monitoring mechanisms will be strengthened to detect and counteract market distortions swiftly.

Promoting Circularity for Metals

Recycling is presented as a key decarbonisation and resource security strategy. Recycling aluminium can save up to 95% of energy compared to primary production, while steel recycling saves around 80%.

To boost circularity, the Commission will promote better scrap collection, sorting, and quality standards, stimulate domestic demand for recycled materials, and introduce recycled content requirements for key sectors such as automotive and construction. A new Circular Economy Act is planned to improve the functioning of scrap markets and secure strategic secondary raw materials for the EU.

Defending Quality Industrial Jobs

The Action Plan emphasizes the social dimension of industrial transformation. Europe’s metal industries support millions of high-skilled, well-paying jobs, particularly in regions heavily reliant on heavy industry.

The Commission pledges to uphold workers’ rights, strengthen social dialogue, and mobilize funds to support re-skilling, job-to-job transitions, and economic diversification. Planned reforms to the European Globalisation Adjustment Fund will extend support to workers affected by restructuring in the steel and metals sectors.

De-Risking Decarbonisation Projects Through Lead Markets and Public Support

Decarbonising metal production is technologically feasible but remains financially challenging. Many projects are economically unviable without public support or „green premiums” from the market.

The Action Plan will promote the creation of lead markets through sustainability criteria in public procurement and subsidies. A new voluntary labelling system for low-carbon steel will be introduced, starting in 2025. Additionally, public funding instruments such as the Industrial Decarbonisation Bank, Horizon Europe calls, and the Critical Raw Materials Act will support decarbonisation and resilience projects across the metals value chain.

A Turning Point for Europe’s Industrial Strategy

The Steel and Metals Action Plan represents a decisive shift in European industrial policy. It combines climate ambition with a renewed commitment to competitiveness, resilience, and strategic autonomy.

Commission officials stressed that while these measures require significant investment and coordination, they are essential to prevent the erosion of Europe’s industrial base and to ensure that European steel and metals industries can thrive in a rapidly changing global environment.

The Commission calls on Member States, the European Parliament, industry leaders, and social partners to work together to implement the Plan effectively — securing Europe’s future as a leading industrial and technological power.